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Yesterday, we posted to the blog a link to the opinion piece written in the National Post. This post generated some heated comments on our blog, some of which we refused to publish, as they were overly polemic in nature. I tracked down the research that the article cited–Beuchelt and Zeller's Profits and Poverty: Certification's troubled link for Nicaragua's organic and fairtrade coffee producers–paid my $40US to get access to it and gave it a thorough read. It kind of reminded me of my grad school days. If it wasn't for the copyright violations I would face, I would post the article here too. Regardless, I would like to provide a more balanced view of the research than was articulated recently in the National Post piece.
To begin the study set out to explore three questions:
- Which types of smallholders participate in conventional, organic and organic-fairtrade certified coffee production schemes?
- In comparison to conventional producers, what are the income effects of participation in certified coffee production?
- How did poverty of conventional and certified small-scale producers evolve in the past ten years and are there any differences in their current poverty levels?
The study used quantitative analysis and randomly selected 327 cooperative members (who produced coffee on small farms located between 900 - 1300 m. a.s.l) who were in turn surveyed with a structured questionnaire. When looking at both organic and organic-fairtrade certified cooperatives, they must have possessed the certification for a minimum of five years. They clearly show their methodology in their paper and to be frank, the math and analysis is beyond me; fifteen years ago while I was a sociology MA student, I probably could have figured it out, but not now.
It should also be noted that the authors of the study clearly state "Although our sample design does not allow for generalizations beyond the study area of northern Nicaragua the results are likely to be representative for coffee growers in higher altitudes in Nicaragua as production conditions are similar in these areas."
Let me say first off that while the research does conclude that there is no measurable economic benefit to organic or organic-fairtrade small holders compared to conventional farmers, none of the producers involved in the study were found to be in good economic situations. The absolute and relative poverty levels of all three groups were far too numerous, and highlight the ongoing poverty issues revealed in the movie After the Harvest. It should also be noted that this study looked at data over the ten year period between 1997 and 2007. This period of time included a significant worldwide coffee price crisis (1999 - 2003).
What the study revealed is that organic and organic-fairtrade farm-gate prices were higher than conventional prices, especially during the worldwide coffee price crisis. Although it should be clear that we are talking an average price difference of $0.04 per pound. Having shown this, the authors go on to show that net income for organic and organic-fairtrade producers is not higher than conventional producers as input costs and yields factor into the equation. The organic-fairtrade producers had lower yields compared to conventional producers, and while organic producers had higher yields, their labour input was much higher, and their average farm size tended to be smaller.
What was not made clear in the National Post article was one of the points made in the research: "the per capita net coffee income in all producer groups is not high enough to enable farm households to meet all basic needs since per capita incomes are below the national and the international $2-a-day poverty line."
Another conclusion of the research was "The hypothesis that relative poverty levels of households participating in organic and organic-fairtrade certification schemes developed more positively than the conventional producers has to be rejected. While not being free of potential selection bias, we see the result as a challenge to conventional assumptions and as an interesting starting point for further research on long-term poverty effects of certification."
They conclude "that the profitability of the organic certified production system is not clear cut; there is a trend that organic but not organic-fairtrade certified producers have higher gross margins and profits than conventional farmers in northern Nicaragua" However they also note that this does not necessarily result in higher per capita net coffee income.
So, in short, this study confirms what many of us in the coffee industry already know. The current production models for small coffee farmers, regardless of certification or conventional, is not working. Producers still experience high degrees of poverty and many go through lean months each year, where there is not enough food to feed their families. All of this goes back to the very difficult questions surrounding sustainability, and how we as members of the coffee community will work together to address this huge and ongoing disparity amongst those who grow our beloved bean.
